Digital

Business
Transformation
Professor N. Venkat Venkatraman
Boston University Questrom School of Business @NVenkatraman

October 12, 2022 1

Every industry is accelerating towards
its digital future—scale, scope and
speed differ.
Every company will need to transform
to effectively compete against born-
digital companies.
There’s no profitable pathway to
growth without digital as innovation
catalyst.
Digital transformation is a leadership
(strategy & organization) challenge.
2
 Two Questions

1. Can incumbents transform before the digital

giants attack with their scale and scope?
2. Can incumbents speed up their
transformation before the startups scale up?

3
 3 Phases of Transformation
Innovation Disruption Transformation

Experimentation Collision Reinvention

at the at the at the
Edge Core Root

What signals What measures What actions

do you perceive? do you record? do you undertake?
 Experimentation Collision Reinvention
at the Edge at the Core at the Root

Digital
Giants

Industry Your Company

Incumbents

Tech
Entrepreneurs
The Digital Matrix in
the Automotive
Sector
Late 19th century Early 21st century
“Horseless Carriage” “Computer on Wheels Connected to the Cloud”

Industrial Product Digital Industrial Product

7
 Tesla’s Master Plan
First Master Plan Second Master Plan
(2006) (2016)

Create stunning solar roofs with seamlessly

Create low volume car,
integrated battery storage;
which would necessarily be expensive;
Expand the electric vehicle product line to
Use that money to develop a
address all major segments;
medium volume car at lower price;
Develop a self-driving capability that is 10X
Use that money to create an
safer than manual via massive fleet learning;
affordable, high volume car… AND
Enable your car to make money when
Provide solar power.
you aren’t using it.
Tesla and AI-Advantage
Engineering Manufacturing Software
15
“the machine that makes the machine.”
 “Fleet Learning”

a new onboard computer …runs the new Tesla-developed

neural net for vision, sonar and radar processing software.
 In shadow mode, operating on Tesla
vehicles since 2016, if the car’s Autopilot
computer is not controlling the car, it is
{data network simulating the driving process in parallel
e ects with the human driver. When its own
leading to better predictions do not match the driver’s
machine behavior, this might trigger the
learning}
recording of a short “snapshot” of the
car’s cameras, speed, acceleration, and
other parameters for later uploading to
Tesla. Snapshots are also triggered when
a Tesla crashes.
18
ff
What data to bring into
evidence during crash?

19
20
 Datagraphs
focused on safety

~$5.5 billion capital raised

1.35 million deaths

worldwide due to 36,900 road deaths in USA (2019) 94% crashes due to human error
vehicle crashes
 r k o n
E m b a }
b e n t s r n e y
c u m n Jo u
{ I n a t i o
s f or m
Tr a n
Human Driven AI Driven

Ownership Transformation Ridership

Transaction Subscription
Lessons From
Games that
Machines Play
May 11, 1997
Feb 16, 2011
March 2016
AlphaGo wins 4-1
“Last year, it was quite humanlike…
this year it became like a God of GO”
~Ke Jie

May 2017
December 6, 2017

28-0-72
Google’s DeepMind
 Humans + Machines

Automate Augment Amplify

Experimentation Collision Reinvention
35
IMPLICATIONS
36
Think Ecosystems;
Not Just Your Firm.

37
 Augmented
Intelligence;
Not
Artificial
Intelligence.
38
 Identify and
overcome your
transformation
traps.

39
Prioritize your {innovate}

portfolio of {no fail}

digital business {test}
experiments. {insights}

40
Immersive
Computer
Reality Blockchain
Vision
Infrastructure

Smart
Machines

Invest in new digital

business capabilities.
41
 5
Adapt
your set of
digital
business
partners.
42
Develop your talent roadmap.
43
 {strategic}

Define your {dynamic}

transformation
scorecard. {actionable}
{metrics
that
matter}

44
 Constitute your best transformation team.

Dreamers Designers Doubters Doers

“The difficulty
lies, not in new
ideas, but in
escaping from
the old ones…”
John M. Keynes
“The secret of
change is to focus
all of your energy,
not on fighting
the old, but on
building the new.” Socrates
Thanks Very Much.

LinkedIn @NVenkatraman